After the government recently reaffirmed its earlier decision to allow Reliance Power Ltd (R-Power) to divert surplus coal from its Sasan project in Madhya Pradesh for a nearby project, the company has asked the Comptroller and Auditor General (CAG) to drop its observations of "undue benefit" in a draft audit report.
The final report is expected to be tabled in Parliament in the current session.
“In view of the action taken by the power ministry to review Sasan coal permission at the highest levels of the government as recommended by CAG and the decision of the EGoM (empowered group of ministers) that the surplus coal permission for Tilaiya would be governed by a comprehensive policy, we would request you to kindly consider dropping the para on undue benefits,” R-Power said in a letter written to CAG last week.
A draft report of CAG on coal allocation had alleged undue benefits to the tune of Rs 15,849 crore, extended by the government to R-Power by way of surplus coal allocation for two of its ultra mega power projects (UMPPs). The report pegged benefit to R-Power from surplus allocation for Sasan UMPP at Rs 4,875 crore. Another Rs 10,974 crore “may accrue” from the Tilaiya UMPP, it said.
CAG officials, however, maintained that a change in the report was not possible since the audit involves scrutiny of decisions during a time period based on the prevailing policy.
"The final report is ready for tabling in Parliament," said one official.
On April 28, the government had decided to stick to an earlier decision to allow
R-Power to divert surplus coal from mines allotted for Sasan UMPP to another nearby project. After a meeting of EGoM, Law Minister Salman Khurshid had said the government cannot review decisions taken in the past.
“The AG (attorney general) had interpreted the decision of EGoM taken in 2008 and had said that the decision was correct. Obviously, we will go by the opinion as it explains and fortifies the 2008 decision,” he had said.
Asked whether the decision would set a precedence and be used by the government for allowing surplus coal diversion in all similar cases going forward, Khurshid had said a comprehensive policy on surplus coal would be finalised soon, based on AG’s recommendations, to avoid ambiguity in future.
AG has opined that the government has the right to permit allocatees to use surplus coal for other projects and that EGoM’s approval to diversion was a well considered decision.
The draft report was quoted in a Times of India news report on March 22 as finding undue benefits through allotments of 155 coal blocks to various companies.
Later, in a letter to Prime Minister Manmohan Singh, CAG had downplayed the draft report, saying “the details being brought out were observations under discussion at a very preliminary stage and do not even constitute our pre-final draft.”